Gila Insurance Group has put together a landlord insurance checklist of things you should discuss with your Insurance agent. While it’s nice to have the list, the question is why are these so important? Here we will break this down, and explain piece by piece why you need to have these conversations.
|Liability Insurance sufficient to cover your assets||_____|
|Personal Injury Coverage||_____|
The liability questions can be tough questions to answer, but are some of the most important questions.
Liability Insurance sufficient to cover your assets – liability insurance covers you if you become legally liable to another person for property damage or bodily injury that you become responsible for usually through a lawsuit. Liability coverage provides coverage for those damages as well as for the cost to defend you. So the amount you purchase is important. A great place to state is to determine what assets you have and are trying to protect. We recommend you have at least enough liability coverage to equal your assets.
Premise Liability – This covers you for things that happen at the investment property. For example, slips and falls, dog bites, and all kinds of weird stuff for which you could be sued. Yes even if it’s your tenants fault, you could still become liable.
Personal Injury – this is excluded under premise liability and covers you in situations where your tenant is likely to sue you. For example invasion of privacy, false arrest, slander, libel and defamation. Every spoken bad about a tenant? There are a number of cases where landlords have been sued by their tenants for behavior of the landlord. Usually these situations are excluded under premise liability, and only covered if you have personal injury coverage.
Medical Payments – This is a no fault coverage that insurance company’s pay so that people won’t sue you. For example, if someone slips and falls and breaks and arm medical payments coverage pays up to the limit on the policy for the medical bills. The idea is if you take care of the person they won’t sue and it will be cheaper for the insurance company.
Umbrella – Are you sure you have enough liability insurance? I mean really sure? An umbrella policy provides additional liability coverage. In some cases it can include premise liability and personal injury. In other cases, just premise liability. We strongly recommend an umbrella policy if you have several investment properties partly because you have more assets to protect.
Loss Assessment – Is your investment in an HOA? If so your HOA has the ability to assess you for things they need to pay for. If that is related to a covered loss then your policy can cover you for those things. For example, does your HOA have a pool or play ground? If something happens there, they will sue the HOA, if something REALLY bad happens there they will max out their insurance policy and then come to you the homeowner (investment property or not), and you will be assessed. Your landlord insurance policy can cover these assessments as long as it’s due to a covered loss.